UOG reports successful well results at Abu Sennan concession in Egypt

15239838875 19c8d43642 cUnited Oil & Gas (UOG), the AIM listed oil and gas exploration, development and production company, has provided an update on the development of El Salmiyah-5 well on the Abu Sennan concession in Egypt

The company stated that well exceeds pre-drill estimates, further building on the success of the last 12 months that has seen a substantial increase in UOG's production share.

The well targeted undrained El Salmiyah Field reservoirs, focusing primarily on the Kharita Formation and secondary goals in the Abu Roash C and Abu Roash E. The rig was released on May 21, 2020, after logging, testing and completion.

The net pay was found at all of the targeted intervals, totalling more than 120m for the well and significantly exceeding pre-drill expectations. The main target interval of Kharita was found to be approximately 16m shallow to of, indicating a larger than expected undrained area updip of the existing wells in the field.

This was further supported by the encouraging well-test results, which achieved flow rates of 4,100 bopd, with a further 18 mmscf/d gas (c. 8,700 boepd in total).

Production from El Salmiyah-5 is expected to generate solid operating margins even at low oil price levels due to Abu Sennan’s low operating costs of around US$6.5/bbl.

Brian Larkin, CEO of United Oil & Gas, said, “As a development well into a known field, the El Salmiyah-5 well was always expected to encounter hydrocarbons. However, with a headline figure of c. 8,700 boepd achieved on test from the primary target in the Kharita, it is fair to say the results have significantly exceeded our pre-drill expectations.

“When coupled with the outstanding result from the ASH-2 well, which was announced in January, and which is still producing at more than 3,000 bopd, from a production point of view, the timing of our entry into the Abu Sennan licence could not have been better.

“The well result is a further realisation of the value we identified in the licence, and is likely to lead to our net production levels from the licence rising to over 2,500 boepd in the coming weeks - a significant increase from January 2019, the effective date of the purchase of the asset. Importantly, with operating costs of around US$6.5/bbl, this production is highly profitable at today’s oil prices.”

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